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PROVISIONS MEANING Provisions meaning states the amount set aside by charging to the Profit and Loss Account, to provide for any known liability, the amount of which cannot be determined with accuracy. ACCORDING TO COMPANIES ACT 2013: “Provision usually means an amount written off or retained by the way of providing depreciation, renewals or dimunitions…
RESERVES ACCOUNTING It refers to the amount set aside out of profits of the business to strengthen its financial position or to meet future contingencies or losses. Reserves Accounting aims to provide the firm with sufficient finance to safeguard itself for upcoming adverse situations. Usually the firm does not distribute the whole amount of profits….
HIRE PURCHASE Hire Purchase system is a system in which the goods are delivered to the purchaser at the time of agreement before the payment of instalments. However, the title of the goods is transferred after the payment of all instalments as per the hire purchase agreement. It is a special system of purchase and…
DEPRECIATION ACCOUNTING Depreciation denotes the decrease in the book value of the fixed assets. It is the permanent and gradual decrease in the value of fixed assets. It is due to use, effluxion of time, obsolescence, expiration of legal rights or any other cause. Depreciation Accounting is done to provide the assets at true value…
Depreciation is the permanent and gradual decrease in the value of fixed asset due to use, effluxion of time, obsolescence, expiration of legal rights etc.
Valid Consideration means something in return i.e. Quid Pro Quo. It is a price that the promisor agrees to pay to the promisee to form a valid contract.
ACCEPTANCE The valid essentials of Acceptance are as follows: According to Section 2(b) of Indian Contract Act, 1872 “When the person to whom the proposal is made signifies his assent, it is an acceptance of the proposal and accepted proposal is called a promise or an agreement”. Thus, when the offeree to whom the proposal…
Offer is an expression of will or intention and also known as proposal. An offer may be express, implied, general, specific, counter, cross and standing.
ESSENTIALS OF VALID OFFER WHAT IS OFFER? The term offer is also known as proposal. It is the starting point in the formation of a contract. According to Section 28 of the Indian Contract Act, 1872 “When one person signifies to another his willingness to do or abstain from doing anything with a view to…
The Indian Contract Act was enacted on 25th April, 1872 and came into force on the first day of the September 1872. It is applicable to every state of India except the state of Jammu and Kashmir. It contains the general principles regarding contracts.
